Retail sales climb but miss forecasts

MICHAEL RODDAN
OCTOBER 01, 2014
BUSINESS SPECTATOR
RETAIL sales continued to grow in August, but fell short of analysts expectations, according to official data.
Australian Bureau of Statistics data showed Australian retail sales rose a seasonally adjusted 0.1 per cent in August to $23.31 billion.
The Australian dollar dropped below US87c after the release of weaker-than-expected figures.
AT 11:31am (AEST) the currency was trading at US86.89c, down from US87.18c just before the data’s release at 11:30am.
Economists surveyed by Bloomberg expected retail sales to lift 0.4 per cent in the month.
While cafes, restaurants and food retailers saw sales growth of 0.3 per cent, department store sales dropped 0.2 per cent and clothing, footwear and personal accessories sales shrank 0.1 per cent.
The ACT led sales growth, expanding 0.4 per cent in the month, with New South Wales and Victoria closely behind, increasing by 0.3 per cent. Retail sales in Queensland and the Northern Territory both contracted by 0.1 per cent.
Commonwealth Bank economist Diana Mousina said the small rise in spending in August was inevitable after solid gains in June and July.
“It looks like the cafes, restaurants and takeaway food services are continuing to be the drivers for growth in spending but department stores sales and clothing tend to be very weak,” she said.
Ms Mousina said a fall in the unemployment rate might help improve retail spending in coming months.
“Consumers are feeling very uncertain about their financial situation, and particularly their job prospects, because we’ve had a quite solid rise in the unemployment rate,” she said.
“The unemployment rate does seem to be tracking around its peak but we’ll need to see the data in the next few months to confirm that trend.”
With AAP